Identify the cost-minimizing labor

Identify the cost-minimizing labor–capital choice

Assignment Help Business Economics

Reference no: EM131245984

A firm has the given isoquant for producing 100 units of output per hour. Given that labor costs a wage of $10 per hour and a unit of capital costs $20 per hour, identify the firm's optimal labor–capital choice to produce 100 units per hour. To do this, use the infinite line drawing tool to draw the cost-minimizing isocost line. Label it "Cost". Finally use the double drop line drawing tool to identify the cost-minimizing labor–capital choice. Label this "(L*,K*)".

Reference no: EM131245984

Questions Cloud

About the term structure of interest rates : Explain what typically happens to bond interest rates in US recessions. Use the demand and supply graph but clearly label any curve shifts and explain the reasons behind those shifts. How does the Segmented Markets theory explain the second fact abou..

Related lending market-asset-backed commercial paper : In 1998, the Syndicated Bank Loan market (defined as loans having more than two bank lenders) was a vast and cheap source of debt financing for U.S. corporations. Over the same time period, in a related lending market, asset-backed commercial paper, ..

Draw the change in supply and/or demand for the bonds : Beginning in 2008, economic conditions began to decline. Investors became unsure about the ability of private firms to repay outstanding obligations and it became difficult to tell high quality private investments from risky investments. draw the cha..

Graph budget constraint for two goods-what is the slope : Given the income equation: $150 = ($10 x Juice) + ($5 x Bread) and the utility function: U = (J.75 B.25) Place Juice on x axis and Bread on y axis. Find both intercept points and solve for and graph a budget constraint for the two goods. What is the ..

Identify the cost-minimizing labor–capital choice : A firm has the given isoquant for producing 100 units of output per hour. Given that labor costs a wage of $10 per hour and a unit of capital costs $20 per hour, identify the firm's optimal labor–capital choice to produce 100 units per hour. To do th..

Governments use to intervene in international trade : If living standards in a country, as measured by output per person, increase, then total output must have: What two main methods do governments use to intervene in international trade?

Gas prices dropping after last weeks spike : In an article titled, Gas prices dropping after last week's spike, that was published in The Atlanta Journal-Constitution newspaper on August 29, 2011, Mike Morris wrote: "After a spike last week as Hurricane Irene threatened East Coast oil refinerie..

What is the level of production : A Monopoly firm faces the following demand curve: P=200-0.5Q Where Q is the output and P is price in dollars. The firm's total cost function is given by TC=20,000 + 40Q 1. What is the level of production? 2. What is the price monopolist should charge..

Draw the indifference curve for each consumer : Using an Edgeworth Box, graph the initial allocation and draw the indifference curve for each consumer that runs through the initial allocation. Be sure to label your graph carefully and accurately. What is the marginal rate of substitution for consu..

User Account

All Pages